Edward Rogers comes out on top in family feud
Rogers Communications' Succession-style boardroom battle took a few more turns late last week and into the weekend, with Edward Rogers emerging as the clear victor and the person left in firm control of one of Canada's top cable and mobile operators.
Edward Rogers was ousted as chairman on October 21, amid opposition to his plan to replace Rogers Communications CEO Joe Natale and replace five of the company's directors with his own hand-picked lot. Edward Rogers, the son of the company's late founder Ted Rogers, has been reinstated in that role following a decision handed down by the British Columbia Supreme Court Friday (November 5) that also cleared the way for him to effectively reconstitute the company's board.
Edward Rogers is also chairman of the Rogers Control Trust, an entity that controls 97% of the voting shares in Rogers Communications. He stated to the Toronto Star that the ruling "resolves important governance issues" at Rogers Communications, and "confirms I acted appropriately, in accordance with Rogers' articles and applicable corporate law."
Rogers Communications issued a terse statement Sunday that it will accept the court's decision and move on: "Rogers Communications Inc. announced today that it will not seek an appeal of last week's British Columbia Supreme Court ruling."
The Toronto-based company had argued earlier that Edward Rogers' move to replace a handful of directors through a resolution rather than a traditional vote at a shareholder meeting was invalid. Edward Rogers' boardroom moves had also been opposed by other members of the Rogers board, including Edward Rogers' mother, Loretta Rogers, and two of his sisters. Shakespearean drama aside, Justice Shelley Fitzpatrick of the British Columbia Supreme Court ruled that Edward Rogers is permitted to replace directors via a written resolution and without calling a shareholder meeting.
The court ruled Friday (November 5) that Edward Rogers' reconstitution of a portion of the board was valid, effective and binding as of October 22, 2021. As a result, Rogers Communications announced that Edward Rogers is chair of the company, and that, in addition to Edward, the board is now comprised of the following individuals: Robert Dépatie, Robert Gemmell, Alan Horn, Philip Lind, Melinda Rogers-Hixon, Martha Rogers, Loretta Rogers, Joe Natale, Michael Cooper, Jack Cockwell, Jan Innes, Ivan Fecan and John Kerr.
The lack of an appeal doesn't mean everyone agrees with the court. Edward's mother, Loretta, and sisters, Martha Rogers and Melinda Rogers-Hixon, called the decision a "black eye for good governance and shareholder rights [that] sets a dangerous new precedent for Canada's capital markets by allowing the independent directors of a public company to be removed with the stroke of a pen," according to the Toronto Star.
Rogers-Shaw deal moving forward
They added that Rogers Communications "now faces a very real prospect of management upheaval and a prolonged period of uncertainty, at perhaps the worst possible time." That's a clear reference to the proposed $20.8 billion merger of Rogers Communications and Shaw Communications.
Still, the court decision should allow the merger process to move forward. Shaw has kept the Rogers board drama at arm's length, confirming last week it remained committed to completing the transaction with Rogers.
But more deal static is possible. The Wall Street Journal reported that two Rogers and Shaw competitors, BCE Inc. and Telus, along with some consumer advocacy groups, have asked Canada's telecom regulatory agency to delay hearings set for later this month on the proposed merger until the uncertainty surrounding corporate control at Rogers is resolved.
Other aspects of the company's leadership appear to be settled, at least for the moment. Joe Natale "remains CEO and a director of Rogers Communications and has the Board's support," Edward Rogers told the Toronto Star. "Our focus must be on the business, a return to stability, and closing our transformational merger with Shaw Communications."
Edward Rogers previously attempted to oust Natale and replace him with since-departed CFO Tony Staffieri. Natale had reportedly learned of the plot through an accidental "butt dial" from Staffieri.
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— Jeff Baumgartner, Senior Editor, Light Reading